Expedia 2014 Annual Report Download - page 37

Division denied that request on June 3, 2013. On September 10, 2014, the New York Supreme Court Appellate
Division reversed the trial court’s order granting the plaintiff’s motion for class certification. In a separate
opinion, the Appellate Division also affirmed in part and reversed in part the trial court’s denial of the online
travel companies’ motion to dismiss. On October 20, 2014, the online travel companies filed a motion for leave
to appeal the Appellate Division’s denial of their motion to dismiss. On October 27, 2014, plaintiff filed a motion
for reargument or for leave to appeal the Appellate Division’s reversal of the trial court’s certification order.
These motions remain pending.
Wake County, Buncombe County, Dare County, Mecklenburg County, North Carolina Litigation. On
November 3, 2006, Wake County, North Carolina filed a lawsuit in state court against a number of online travel
companies, including Hotels.com, Hotwire, and Expedia. Wake County v. Hotels.com, L.P., et al., 06 CV 016256
(General Court of Justice, Superior Court Division, Wake County). On February 1, 2007, Buncombe County,
North Carolina filed a lawsuit in state court against a number of online travel companies, including Hotels.com,
Hotwire, and Expedia. Buncombe County v. Hotels.com, et al., 7 CV 00585 (General Court of Justice, Superior
Court Division, Buncombe County, North Carolina). On January 26, 2007, Dare County, North Carolina filed a
lawsuit in state court against a number of online travel companies, including Hotels.com, Hotwire and Expedia.
Dare County v. Hotels.com, L.P., et al., 07 CVS 56 (General Court of Justice, Superior Court Division, Dare
County, North Carolina). On January 10, 2008, the county of Mecklenburg, North Carolina filed an individual
lawsuit in state court against a number of online travel companies, including Expedia, Hotels.com, and Hotwire.
County of Mecklenburg v. Hotels.com L.P., et al., (General Court of Justice, Superior Court Division,
Mecklenburg County, North Carolina). The complaints allege that the defendants have failed to remit hotel
accommodations taxes as required by municipal ordinance to the counties, and include claims for violation of the
local ordinance, as well as claims for declaratory judgment, injunction, conversion, constructive trust,
accounting, unfair and deceptive trade practices and agency. On April 4, 2007, the court consolidated the Wake
County, Dare County, Buncombe County, and Mecklenburg County lawsuits. On May 9, 2007, the defendants
moved to dismiss the lawsuits. On November 19, 2007, the court granted in part and denied in part defendants’
motion to dismiss. On November 1, 2010, the parties filed cross-motions for summary judgment. On
December 19, 2012, the court granted defendants’ motion for summary judgment and denied plaintiffs’ motion
for summary judgment. The court concluded that defendants could not properly be classified as operators of
“taxable establishments” or “business[es] subject to a room occupancy tax” under any of plaintiffs’ occupancy
tax ordinances or resolutions and are thus not subject to plaintiffs’ occupancy taxes. Plaintiffs appealed. On
August 19, 2014, the North Carolina Court of Appeals affirmed the trial court’s conclusion that the defendant
online travel companies are not liable for occupancy taxes. On September 23, 2014, plaintiffs filed a petition for
discretionary review with the North Carolina Supreme Court. On December 18, 2014, the North Carolina
Supreme Court denied plaintiffs’ petition.
City and County of San Francisco, California Litigation. On May 13, 2008, San Francisco instituted an
audit of a number of online travel companies, including Expedia, Hotels.com, and Hotwire, for hotel occupancy
taxes claimed to be due from 2000 through the third quarter of 2007. The city completed its audit and issued
assessments against the online travel companies. The online travel companies challenged those assessments
through an administrative process. The hearings examiner upheld that assessments. On May 9, 2009, the online
travel companies, including the Expedia companies, filed a petition for writ of mandate in the California Superior
Court seeking to vacate the decision of the hearing examiner and asking for declaratory relief that the online
travel companies are not subject to San Francisco’s hotel occupancy tax. Expedia, Inc. v. City and County of San
Francisco, et. al.; Hotels.com, Inc. v. City and County of San Francisco, et. al.; Hotwire, Inc. v. City and County
of San Francisco, et. al., (Superior Court of the State of California, County of San Francisco). On June 19, 2009,
the court granted the city’s demurrer on the “pay first” issue relating to pay-to-play provisions. Expedia and
Hotwire’s appeal of the “pay first” decision was denied, as was Hotels.com’s appeal. The total assessed amount
paid by the Expedia companies was approximately $48 million. On February 6, 2013, the court held that the
online travel companies are not liable to remit hotel occupancy taxes to San Francisco. On October 10, 2013, the
court entered judgment in favor of the online travel companies. On December 9, 2013, San Francisco filed a
notice of appeal. San Francisco also has issued additional tax assessments against the Expedia companies in the
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